G.R. No. 216161 , August 9, 2017
COMMISSIONER OF INTERNAL REVENUE, Petitioner, vs. PHILIPPINE-ALUMINUM WHEELS, INC., Respondent.

FACTS

The Bureau of Internal Revenue (BIR) issued a Final Assessment Notice (FAN) for deficiency taxes against Philippine-Aluminum Wheels, Inc. for the taxable year 2001. Following a request for reconsideration, the BIR issued a Final Decision on Disputed Assessment (FDDA) on November 8, 2006, demanding full payment. The FDDA was served via registered mail on April 12, 2007. The respondent did not appeal the FDDA to the Court of Tax Appeals (CTA) within the 30-day reglementary period. Instead, on September 21, 2007, the respondent availed of the Tax Amnesty Program under Republic Act No. 9480 by filing the required Notice of Availment and Tax Amnesty Return and paying the corresponding amnesty tax.
The BIR denied the respondent’s application for tax abatement and its availment of the tax amnesty. The BIR contended that the FDDA had already become final, executory, and demandable due to the respondent’s failure to timely appeal it to the CTA. The BIR argued that this finality rendered the assessment ineligible for the amnesty. The respondent filed a Petition for Review with the CTA, assailing the BIR’s denial.

ISSUE

Whether the respondent is entitled to the benefits of the Tax Amnesty Program under R.A. No. 9480 , notwithstanding the finality of the tax assessment.

RULING

Yes, the respondent is entitled to the tax amnesty benefits. The Supreme Court affirmed the decisions of the CTA First Division and En Banc. The legal logic centers on the nature and scope of R.A. No. 9480 . A tax amnesty is a general pardon or intentional overlooking by the State of its authority to impose penalties, granting taxpayers a chance to start with a clean slate. While such grants are construed strictly against the taxpayer, the plain language of the law is controlling.
R.A. No. 9480 explicitly covers “all national internal revenue taxes for taxable year 2005 and prior years, with or without assessments duly issued.” The law does not contain any exception for assessments that have become final and executory. The BIR’s position, based on its own Revenue Memorandum Circular (RMC) which excluded “delinquent accounts,” effectively sought to add a disqualification not found in the statute. An administrative issuance, such as an RMC, cannot amend, expand, or limit the substantive provisions of a law enacted by Congress. To uphold the BIR’s interpretation would be to unlawfully create a new exception and contravene the legislative intent behind the broad amnesty coverage.
Since the respondent fully complied with all requirements of R.A. No. 9480 —including timely filing and payment—it is entitled to the immunities and privileges provided therein. The finality of the assessment does not disqualify the respondent, as the law’s coverage is unequivocal. Therefore, the deficiency tax assessment was correctly set aside.